Ammo prices to fall?

M

maee

Joined
May 10, 2007
Messages
939
Likes
38
Feedback: 3 / 0 / 0
Some good news about the recent meltdown in the economy is that commodities prices are beginning to drop as global demand drops. Looking at the Dow Jones Non-Ferrous Metals Index, you can see that prices for metals used in ammo like copper, lead and aluminum have dropped to two year lows: http://finance.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chdet=1222744861011&chddm=467499&q=INDEXDJX:.DJUSNF&ntsp=0

big.chart


But if your wondering if ammo prices follow this index, compare the AR15.com historical ammo chart from 2004-2006 to the index over the same period. The index went up by 220% over this period, while ammo went up by 170%:

http://finance.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chdet=1168030800000&chddm=250560&q=INDEXDJX:.DJUSNF&ntsp=0

2s92cl3.gif
 
You would certainly think costs should drop considerably... although who know how long it will take to see anything.
 
Lugnut said:
You would certainly think costs should drop considerably... although who know how long it will take to see anything.
Click to expand...

Another thing I forgot to mention is the price of oil. It has fallen from about $145 to $95 recently. Since ammo is so heavy, this is a big component of increasing costs.
 
maee said:
Some good news about the recent meltdown in the economy is that commodities prices are beginning to drop as global demand drops. Looking at the Dow Jones Non-Ferrous Metals Index, you can see that prices for metals used in ammo like copper, lead and aluminum have dropped to two year lows...
Click to expand...

Just don't expect to have it happen right away. companies rarely pay spot prices for raw material when the price is going up. They pre-buy at a fixed price (but take delivery over time) large amounts and I would be surprised if it didn't happen this time around. Hence the delay in the increase in prices on the finished product. When they run out, then they can buy on the spot market. Also, they won't give back all of the drop, so ammo will always cost more in the next trough than in the last one.
 
I don't think ammo prices will ever be back to the "golden days" pricing of where you can get 1000 rounds of .45 for less than $200.

I think the "edge might come off" some prices on commercial ammo eventually, if the commodity prices stay lower, but if anyone thinks the pricing we had in 2004 or so is going to come back, I have a contact in Nigeria that would like to speak to you. [laugh]

One unpredictable factor is military surplus ammo. Part of the reason things like .308 and .223 are off the wall is because there is literally no milsurp to saturate the demand for these two calibers. Not all that long ago things like abundant SA milsurp, radway green, etc, basically forced commercial ammo prices in those two calibers to fall because people simply weren't buying it as much, which caused the demand for "new" ammo in those calibers to be relatively soft. Of course, as I stated in another recent thread, the "IANSA gun pussy treaty" that some UN members have been signing onto can drastically effect this. If many countries are going to play along with that crap, then the number of military surplus sources is going to be somewhat reduced.

-Mike
 
Last edited:
Chris said:
Don't forget the Clinton Executive order that FORBIDS any US surplus ammo to be sold except from the CMP, and they don't sell .308 and .223. Thus, all the surplus is being BURNED or disassembled.
Click to expand...

Yeah that too, but that's been going on long since before the huge price jumps in ammo occurred.

-Mike
 
Chris said:
Don't forget the Clinton Executive order that FORBIDS any US surplus ammo to be sold except from the CMP, and they don't sell .308 and .223. Thus, all the surplus is being BURNED or disassembled.
Click to expand...

The destroy hunting rounds??? God... Never mind, just [horse].
 
Chris said:
Don't forget the Clinton Executive order that FORBIDS any US surplus ammo to be sold except from the CMP, and they don't sell .308 and .223. Thus, all the surplus is being BURNED or disassembled.
Click to expand...

Would the factories be a source of milsurp .223 and .308 once the war is over? If whomever is contracted to make these loads for .mil has an extra 10 million rounds in storage that they anticipated selling to the military, but that never left their privately held warehouses.. Does that count as surplus under the Clinton order? Or would the companies manufacturing for .mil do so only on a pre-paid basis, making this question a moot one?
 
JimB said:
having been stationed at an ammo dump in the early 60's i can confirm
that a lot of outdated surplus ammo was burned. by the shitload.

JimB
Click to expand...

they used to do massive ammo burns in kosovo also.
its a total waste of ammo. all that destroyed ammo could easily go towards extra weapons training or even OPFOR weapon familiarization, which the US blows at doing.
 
pernox said:
Would the factories be a source of milsurp .223 and .308 once the war is over? If whomever is contracted to make these loads for .mil has an extra 10 million rounds in storage that they anticipated selling to the military, but that never left their privately held warehouses.. Does that count as surplus under the Clinton order? Or would the companies manufacturing for .mil do so only on a pre-paid basis, making this question a moot one?
Click to expand...

Stuff that doesn't enter official DOD channels doesn't "count" as part of the EO.

You can forget about getting any of it though... I've heard from numerous sources that the government is just about buying up every round made by Lake City, etc, at least those that pass QC. (Note- some stuff doesn't pass... thats why you see things like XM/PD ammo... but it still gets a big penny despite its "reject" status, because a lot of the rejection reasons are benign, save for some really bad lots of PD )

Further, even if there -is- an overrun, you can bet dollars to doughnuts that Fed/ATK is gonna sell it at normal commercial prices, because it's still basically fresh ammo, as opposed to stuff which sat in a bunker for 10 years which the DOD auctions off at a portion of what it actually cost them to buy. The reason most milsurp ammo is (rather, was) cheap is the entities that have the stores of it are essentially dumping it at a loss for the sake of rotating the ammo out. Now, because of the clinton EO, at least within the DOD that ammo that's getting "rotated out" is usually getting sent off to get de-milled and pulled down into components or simply destroyed outright.

-Mike
 
Last edited:
SemiAutoSam said:
The cost of the components is only one part of the cost of ammo.

Another is the decline in value of the USD.

This applies to just about every consumable commodity though.
Click to expand...

Don't count the dollar out. It's rallied hard in the past couple months against the Euro. At it's worst, earlier this year, the 1 Euro = $1.59, while today it closed at $1.40. For comparison, when I visited Europe in 2003, 1 Euro = $1.29. We're not too far off from there if the dollar keeps up it's recent gains.
 
drgrant said:
Stuff that doesn't enter official DOD channels doesn't "count" as part of the EO.

You can forget about getting any of it though... I've heard from numerous sources that the government is just about buying up every round made by Lake City, etc, at least those that pass QC. (Note- some stuff doesn't pass... thats why you see things like XM/PD ammo... but it still gets a big penny despite its "reject" status, because a lot of the rejection reasons are benign, save for some really bad lots of PD )

Further, even if there -is- an overrun, you can bet dollars to doughnuts that Fed/ATK is gonna sell it at normal commercial prices, because it's still basically fresh ammo, as opposed to stuff which sat in a bunker for 10 years which the DOD auctions off at a portion of what it actually cost them to buy. The reason most milsurp ammo is (rather, was) cheap is the entities that have the stores of it are essentially dumping it at a loss for the sake of rotating the ammo out. Now, because of the clinton EO, at least within the DOD that ammo that's getting "rotated out" is usually getting sent off to get de-milled and pulled down into components or simply destroyed outright.

-Mike
Click to expand...

Thanks for the knowledge!

Sucks, but thanks nonetheless.
 
When (if?) will the drop in commodity prices favorably affect ammo prices

Are ammo group buys even worth doing right now? Maybe it's worth hanging back for 6 months or so.

We've seen a huge run up over the past couple of years in metals, copper, aluminum, steel, lead, etc. Now things look to be tanking along with the economy.

Political factors aside, how long before ammo prices start to take a similar hit? I'm new to shooting, so I'm really only vaguely familiar with today's prices for a couple calibers.

Check out the charts...

Brass : copper and zinc have been getting hammered very recently.

Copper has been well above $3 for 4+ years and has touched $4. It's taken a nosedive to just over $2. Heck, just in the past 90 days from $3.75 to $2.10 or so.

Zinc is getting hammered too, from a $2 high to $0.50.



PublicCharts.aspx


PublicCharts.aspx


Lead: Highs of $1.75 to $0.50:
PublicCharts.aspx


Cartridge brass is something like 30% zinc, 70% copper, so it's roughly a 50% drop in the raw materials to make the cartridges. Raw materials for bullets are down 70% as well.

At some point it just has to be reflected in store prices. Another factor.. the Iraq war will be ending relatively soon, or at one would figure sooner rather than later if obama gets in. Which may lessen the competition between the public and the military for ammo.
 
Last edited:
it'll take 4-6 months at the lower level to come back. I buy copper wire all the time, it's down, but not where it should be. The inventory was purchased at the higher level, until that's gone it'll still be at a higher price than what is currently market level.

Conversely, If you went to sell copper to a junkie, he'd give you the $2/lb rate
 
you assume in 4 to 6 months after the ObaMessiah is coronated, that the 500% taxes added onto ammunition, mandatory licenses to own ammunition, restriction and prohibition of most center fire ammunition ...will make the prices less ????
 
hikerlt said:
you assume in 4 to 6 months after the ObaMessiah is coronated, that the 500% taxes added onto ammunition, mandatory licenses to own ammunition, restriction and prohibition of most center fire ammunition ...will make the prices less ????
Click to expand...

500% tax? I'm sure that will be passed overnight. [rolleyes] Nice set of assumptions you've got there [hmmm] .
 
However if Obama is elected, there may be a run on the gun & ammo stores in anticipation of forthcoming bans or taxes. Seller's market.

Some may want to wait and see but I'm not passing up any good deals right now.
 
OnTheRoad said:
However if Obama is elected, there may be a run on the gun & ammo stores in anticipation of forthcoming bans or taxes. Seller's market.

Some may want to wait and see but I'm not passing up any good deals right now.
Click to expand...

I've been thinking along those lines also...[sad]
 
OnTheRoad said:
However if Obama is elected, there may be a run on the gun & ammo stores in anticipation of forthcoming bans or taxes. Seller's market.

Some may want to wait and see but I'm not passing up any good deals right now.
Click to expand...

That's my thought process as well. Just going off the past trends even with the commodity drops the prices have yet to dip lower. I figure buy now in anticipation of more potential increases. Taking the "better safe than sorry" approach is my plan. Now that I have lots of ready ammo I just need to buy some reloading equipment and components and I am good.[smile]
 
Ammo prices are high because of the dried up surplus and because domestic ammo manufacturers are making ammo for our troops in Iraq and Afganistan, and foreign ammo manufacturers like Wolf in Russia or Selelr and Bellot are too busy making ammo for contries like Korea and Iran. With so much demand for ammo for troops, theres not much time left to manufacture ammo for civilian use. hense why the prices are so high.
 
uziduzit said:
Ammo prices are high because of the dried up surplus and because domestic ammo manufacturers are making ammo for our troops in Iraq and Afganistan, and foreign ammo manufacturers like Wolf in Russia or Selelr and Bellot are too busy making ammo for contries like Korea and Iran. With so much demand for ammo for troops, theres not much time left to manufacture ammo for civilian use. hense why the prices are so high.
Click to expand...

It's not just that. It is, or was until very recently, also a matter of the same raw materials being bought by other countries for other products. China and India in particular are using a lot of lead, copper, zinc, and so on. Also, the weaker dollar made everything more expensive. Same dynamic as for oil. With demand dropping, fuel prices dropping, and ammo use in Iraq dropping, the price might drop.
 
OnTheRoad said:
However if Obama is elected, there may be a run on the gun & ammo stores in anticipation of forthcoming bans or taxes. Seller's market.

Some may want to wait and see but I'm not passing up any good deals right now.
Click to expand...

I guess you'd be better off regretting that you didn't get a better price than finding that you can't get any ammo at all. I wish I had some cash ...
Maybe Obama will spread some ammo around.
 

Similar threads

  • Locked
Ammo Shipping to Mass
Replies
25
Views
747
drgrant
drgrant
Biden's LEAD AMMO BAN?
Replies
8
Views
462
MGnoob
MGnoob
Czechoslovak Group to Buy U.S. Ammo Makers with Financing from JP Morgan Chase
Replies
2
Views
177
Rockrivr1
Rockrivr1
Does Shooters outpost negotiate used gun prices?
2
Replies
53
Views
2K
EJFudd
EJFudd
DOJ to reschedule cannabis/pot/marijuana to Schedule-III
3 4 5
Replies
134
Views
2K
Dench
Dench
Back
Top Bottom